Guide To UAE VAT Registration Process

VAT in UAE Introduced from 1st Jan 2018. In this blog, we have discussed filling VAT Registration process in UAE.


FTA has urged at businesses to register for the VAT before April 30, to defer last-minute hassles.You can download the PDF of Federal Decree-Law No.(8) of 2017on Value added TAX.

Federal Decree-Law No. (8) of 2017

The requirement of UAE VAT Registration process :

1. Compulsory Registration for business those gross salary is more than AED 375,000.
2. Voluntry Registration for business Whose turenover is between AED 187,500 & AED 375,000.
3. Startups business whose VAT overage expenses are more than AED 187,500.

Important Document for UAE VAT Registration process :

Required Document for Registration :

• Copy of Business License
• Passport copy of Owner/partners
• Emirates ID of Owner/partners
• Memorandum of Federation (MOA)
• Details of Company’s Bank Account and IBAN
• Details Business Turnovers such as on Balance Sheet, Audited Reports or Bank Statements for the last 12 months 
• Registration code of Customs Authority

Some other Details for VAT Registration process:

1. Address and P.O. Box number for Company's registration
2. advanced income and expenditure for the next 30.
3. Details of Busines Activities like Import/Export or Trading.
4. Names of all GCC countries if doing business with them.
5. Name of Tax Group if want to one tax group number for all the entities.

UAE VAT Registration Process:

Before starting the VAT Registration Process  check  the above-mentioned documents and details 

• Go to FTA online Portal
• Sign up for a new account.
• After successful login, start your registration process.
• Enter Details and Submit application.
• After submission, TAX Registration Number (TRN) will be provided to the user.

Businesses will be notified by email and SMS when your TRN is generated. 

How to Get VAT Registration Number (TRN) in UAE

The VAT  launched in UAE, After that, some rules have changed in UAE, A person whose turnover more than AED 375,000 should mandatorily for VAT Registration and a person whose gross sales exceeds AED 187,500, is permitted to apply for Voluntary registration.

The person who fills the VAT Registration,  The authority provide a unique number that called the Tax Registration Number and another name is TRN.

The tax registration number is unique VAT number that provides the authority will be able to identify you.

The taxable person who allows a VAT registration number that called the 'Registrant'.The VAT registration in UAE has been 15 digits.The taxable person who has got the VAT registration number, those are derived the UAE VAT Law and the Executive regulations and these documents like VAT returns, Tax Invoice, Tax Credit note and in all other documents.

The better understanding more about the VAT registration number and the knowledge the usage of VAT number, few short FAQson the VAT Registration Number.

How will get a user VAT Registration Number?

When the taxable person fills the VAT Registration and successfully verification, After that, the VAT registration number will be issued.

Who has issued the VAT Registration Number?

VAT Registration number issued by The Federal TAX Authority of UAE after that when your registration application is successfully verified.

How many digits in VAT Registration Number?

It is expected to have 15 digits.

Is it compulsory for the registrant to mention the VAT Number in VAT returns?

Yes, when VAT Return filled it is mandatory for a registrant to mention his VAT

number. Only from the VAT number, the FTA will easy to able identify the taxable person

What type of documents is that registrant required to mention the VAT Number?

It is mandatory to mention the VAT number following document:

• VAT Return
• TAX Invoice
• Tax Credit Note

Some other document is prescribed by the UAE VAT Regulation

When a taxable person want to join a tax group, so that will be issued to him VAT Number?

Definitely Yes, when a taxable person is already registered with FTA, then he will be right of the VAT registration number, that's the reason he can join the tax group. If not, he must submit the VAT registration form and upon submitting, a Tax Identification Number (TIN) will be issued.

Using TIN, he can join the tax group. Remember the important point, the TIN is not a valid TRN, this number issued by the FTA for tax identification purposes only.

What is The Difference Between VAT and Sales Tax ?

Taxes are a source of income for any governments. While there are taxes for a different variety of things that be paid by a variety of people, a possibility is that as a citizen pays at least one tax or another. The Sales Tax and Value Added Tax (VAT) are two such taxes.

A sales tax is also an expenditure tax, just like the VAT. For the general public, there is two type of VAT and there may be no observable difference between how the two types of taxes work, but there are some major differences.

In many other countries, sales taxes are only imposed on transactions include goods. In addition, sales tax is only allowed on the final sale to the consumer. This opposite with VAT which is applied to goods and services and is charged throughout the final sale, including on the supply chain.

VAT is also applied to imports of goods and services Tax so as to ensure that a level  Deliverer field is maintained for domestic providers of those same goods and services. Many countries prefer the VAT over sales taxes for a many of reasons Recently VAT in UAE has been launched on 1 Jan 2018.

Importantly, VAT has contemplated a more sophisticated perspective to taxation as it makes businesses serve as tax collectors on behalf of the government and cuts down on bad reporting and tax evasion.

The Sales Tax and VAT  both are consumer taxes, that means that they have to be paid whenever one purchases a product that is meant to be consumed or used. However, sales tax is a type of direct tax, while VAT is an indirect tax.

That's means, that sales tax is directly applicable and is directly calculated on the selling price, while VAT  calculated indirectly on every stage of manufacturing.

Comparison between Sales Tax and Value Added Tax (VAT):

	Sales Tax	Value Added Tax (VAT)
Description	A government tax allow for sales of certain goods and services	A government tax levied for goods purchased
Type	Direct Tax	Indirect Tax
Nature	Single point tax	Multi point tax
Charged on	Sales of few goods and services	Value added to the product at every stage of manufacturing
Charged to	The final customer in the supply chain, the end user	The final customer or reseller
Levied by	Levied by the Government	Levied by the Government
Levied on	Total Value	Value Added
Calculated on	Calculated on the selling price of the product	Calculated on the purchase price of the product.
Calculated as	A percentage of the taxable price of the sale	Calculated on the value that is added to the product at every stage of manufacturing
Calculation	Easier, it is simple and easy to calculate.	Complicated, as proper accounts should be maintained at each stage of manufacturing for the product

What Is Taxable Income in UAE and How do VAT Calculation?

These time The VAT Registration has been rampant for the past few months because of Federal Tax Authority (FTA) has to provide the facility that many businesses have been registering now for the value-added tax (VAT). After the FTA provides registration for VAT and starts Excise Tax on their website.

VAT in UAE has been changed the history of the United Arab Emirates (UAE) once it implements the starting of the year. VAT is a consumption tax that has been applied, at each stage, to all the goods and services that are mandated in the VAT Law or the Federal Decree-Law No. 8 of 2017. The VAT has generated the value that is added during the production process.

The VAT Registration businesses have the responsibility of having the reasonable and accurate documentation for the VAT-related affairs, But it's very important that how to VAT Calculation is done.

The failure to do the provisions stipulated in the landmark Federal Decree-Law No. 7 of 2017 or Tax Procedures Law, Federal Decree-Law No. 7 of 2017 or Excise Tax Law, and Federal Decree-Law No. 8 of 2017 or VAT Law, will face deeply penalties.

The formula to Calculate The VAT

The rate of VAT in UAE has been 5%, which is one of the lowest rates in the world. Since the government will not directly to collect the VAT, so the companies are going to charge them to the customers.

Useful Article: Zero Rated Supplies Under VAT in UAE

The formula for Calculating VAT is as follows:

VAT = Output Tax − Input Tax

Output Tax:

The Output tax is simply the VAT collected on selling goods or legislation services to clients.

Input Tax:

Input tax is the VAT that is paid on purchasing raw materials for the above-mentioned goods or services.

How to gather VAT as a Businessman?

All dealer who are confluent in the chain of production, which includes the supply of materials for production or the production process itself, should do the following:

• Gather the VAT on the sales, which is output tax
• Protect the amount of VAT that is paid on the purchase of goods, which is the input tax

Subtracting the input tax from the output tax will have the amount that will be paid to the government.

There are conditions wherein businesses can forward an instance to the government for a refund of VAT although not everyone is permitted to do that. In this case, the businesses will act as the government’s tax collectors.

Preparation and Registration as a VAT Collector

It is never an easy task to sense the concept of VAT in one go.

That's the reason why we are offering a free evaluation if you are in need of any help in regards to VAT registration and calculation in UAE.

Connected Thinking: VAT in UAE and India

Last many years, The UAE and India have a good relationship and its become to be very strong, mostly in trade and commerce. The relation between two countries has got better with similar laws and regulations implemented by both countries it to possible only both region.

While Value Added Tax(VAT) have talk past in India now India not allow the VAT, The UAE launched the new tax government to drive the economic development of the country.


India first introduced Central Excise (Central VAT) with the objective of levying duty on creative activity. At the beginning limited to raw materials and components, after that, the scope of the VAT was the increase because extended to include capital goods.

Many years, the government announced the introduction of a State VAT in 2005 to levy VAT on sale of goods.

The VAT Rates in India had differed in every state and were based on the type of goods sold. The VAT is multistage Tax which is denoted at each stage of supply of goods which involve sale/purchase.

Every person is required to VAT Register because any person will be earning an annual turnover of more than Rs.5 lacs (around 29,000 AED) by supplying goods.The VAT was taxable both on local as well as an inter-state supply of goods.
Normally, in the UAE VAT was announced at a starting rate of 5% in this year. while not every item under the to the vat, there were a few exceptions including healthcare and education.Besides, only those businesses crossing the defined annual aggregate the turnover threshold was liable to register under VAT.

The companies in the UAE that report a yearly turnover of over Dh375,000 or more were grateful to be registered with the UAE VAT system. Companies whose turnover is around Dh187,500 had the option to register for VAT during the first phase of the VAT Implementation.

How to Implement VAT in Your Business?

Value Added Tax (VAT) is an indirect tax and it is a new concept in UAE because recently there launched the VAT. This is collected at each stage of sale and is also known as the consumption tax.

Some Steps to Implement the VAT in our Business

1. VAT Registration

After launching the VAT in UAE each and every business must be required to be VAT registered it doesn't matter the business is small and medium enterprise.
The registration applications are accepted through the official online portal.

• Prepare all the information for the VAT registration
• To verify the information on check government portal
• Register VAT with Federal Tax Authority

2. Understand the organization structure

The organizational framework reflects the leading role of MoF in the fields of finance and economy.
The UAE government achieving the sustainability of federal financial resources and development plans.

• Understand the business operations
• Required to Provide training to the Management and employees

 3. To Analyze the impact of VAT on business  

The value-added tax (VAT) has been announced, tax paid on most business overage can be offset as input tax, but some expenditures do not qualify for tax dues.

• To analyze your  dogmatic stamen
• Examine the VAT impact for your business

4. The VAT Return Filing

• Preparation of VAT returns
•  observe of TAX credit notes issued and received.
• Preparation of VAT Audit File

who have provided incomplete or incorrect registration details are also not given their TRN or registration certificates by the FTA. These businesses will have to pay fine of Dh20,000 according to the FTA Law.

Introduction of VAT Impact on Real Estate in UAE

If the UAE launched new TAX that it could hurt commercial real-estate landlords. who may clash to pass  Extra costs on to their tenants.

The UAE has been introduced a 5 percent Value Added Tax(VAT). A general expenditure tax which applies to the many of deal in goods and services – at the start of the year.

While the effect on the residential real-estate will be “minimal” but the more Impact on the Retail and hotel sectors, according to Craig Plumb, JLL’s Head of Research in MENA.

He said, "it's a negative, but not too big,". According to him, noting the 5 percent a rate is relatively low compared to international standards.plumb said that Given the recently soft nature of the UAE's market, landlords will clash to pass the VAT cost on to their tenants."

It's not possible for office and retail rents to rise by five percent, so that's that region owner will going to have to absorb some of that increase.

The real-estate market in UAE has very slow over last 2 year, with further is inferior expected in sales and fare-prices. The UAE Real Estate market has been by force to adjust to less increase as the "new normal" in 2018, said by Plumb, with all department of the market remaining in the inflection stage of their cycle.

Retail Ramifications

The value-added tax is likely to slow future increment by adding around two percent to Customer prices this year, so it's a biggest negative impact will see the retail the sector, according to Plumb.

This will likely curb the development of the further retail project.

He said,"There obviously is too much retail space being improved at the moment- which is great for you if you are a retailer, not so good if you are a center owner.

The UAE Tax Authority To Abandon Late VAT Registration Penalties

Announced by the UAE's Federal Tax Authority (FTA)  that those types of business Which do not yet filled the VAT registration, it will waive late registration penalties, only for the condition that they do so by April 30 of this year.

In the statement issued on 5 March, The FTA explained that regardless waiving penalties until the end of April, The VAT due since the introduction of the tax on January 1 must still be paid.

All business in UAE is required to VAT Registration and collect and remit the value-added tax.

If until a time during the last 12 months the value of their taxable supplies proceeds increases the compulsory registration threshold of AED375,000 (USD102,110), or if the entity anticipates that they will exceed the threshold within the next 30 days.If any time until the last 12 month the value of taxable supplies.

Tax payable person can register voluntarily if the total income of their taxable supplies exceeded AED187,500, or if the business expects to exceed that threshold within the next 30 days.

New Deadline For VAT Registration Extended Until April 30

Federal Tax Authority(FTA) has announced new date of penalties for VAT registration after that major relief on Wednesday UAE was exempted from the penalties for a couple of months. The FAT gave a new date of VAT Register is 30 April.

These companies have until 30 April to register for a value-added tax(VAT) that avoid the administrative penalties as many as couldn't meet the earlier deadline due to technical and other issues.Investment analysts said that companies who missed the deadline they are a smaller business, these are free zones and have many branches of foreign companies.

Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, Minister of Finance in UAE and Chairman of the FTA, in FTA meeting, also observe the outcome of the tourist refund because of this refund system will cover outlets and shops.

Sheikh Hamdan said "The result is all the business sector and all segments of society response are very satisfactory.the tax compliance ratios are continuous growth, which is confirmed by the success of the model adopted by the FTA, which is based on the encouraging self- adherence to easy electronic registration is by the businesses".

 "The first major beneficiaries are those would be the entities those could not register up to December 4, 2017, or are going to apply now", said Surandar Jesrani, partner, and CEO at Morison MJS  In a Tax Consultancy.

Jesrani said "the free zone companies and branches of foreign companies will be included in the entities and these type of entities were hope some relaxations and discount from the VAT and hence it could not register before the deadline after launching the VAT in UAE.

" The FTA has already 260,000 companies registered .it will be noticed that those businesses that have not registered for VAT it cannot invoice and collect VAT".

"The UAE businesses did registration in time, but there are some small and medium enterprises that could not register due to lack of preparedness," said Naveen Sharma, chairman of the Institute of Chartered Accountants of India (Dubai chapter).

"The UAE businesses did registration in time, but there are some small and medium enterprises that could not register due to lack of preparedness," said Naveen Sharma, chairman of the Institute of Chartered Accountants of India (Dubai chapter).

UAE’s Jewelers Hope For a Rethink on 5% Import Fee

After launched the VAT in UAE many of goods are under the VAT.Two months in recent history are complete, The UAE has a duty tariff of 5 percent on jewelry imported by wholesalers.Dubai and UAE have historically offered concession as part of their efforts to ensure the country’s standing as the region's gold and jewelry business hub.Recently the biggest hope is that something will be about the gold jewelry rethink on 5 percent import fee.

The sources say the discount is being weak down Recent month along with 5 percent VAT were the factors behind the gold's price inflation rate at a local retail and the last year  UAE decided to 5 percent fee on Gold jewelry. while import duty will be on par with those in most of the other Gulf markets.That's why the jewelry business believes in the Gulf government can now help them out.

UAE's jewelers hope for a rethink on 5% import duty

Chairman of Joyalukkas, Joy Alukkas said some talk at the GCC level that the customs union might consider a prevention of the 5 percent fee on the Jewellery markets.The current price of gold jewelry differential on a gram at the retail level between UAE and India is 3 percent.Dubai has imposed a 5% import fees on gold and diamond jewelry, a move which is likely to hurt Indian exports at a time.

"The VAT is a reality and when the government is launched VAT after that they can not make a change. But when business gets some help on the customs duty so it would be positive for us.Recently, the 5 percent tax and 5 percent VAT have eroded much of the price advantage in Dubai's gold business profit used to have compared to rates in India, Sri Lanka, and Pakistan."

International bullion prices continue to be on the growth side,5 March opening at $1,328.2 (Dh4,878.47) an ounce. This compares with $1,242 on December 12, with prices even touching $1,366 in January. The gold prices in the “high range”, leading jewelry retailers are now trying to see whether they can get price benefits from local manufacturing of gold jewelry.

Its removal could make local gold prices

Jewelry made here will only be charged 5 percent VAT. Now there is no import duty on bullion imports.Jewelry wholesaler said that the gold industry in the UAE already works on the lowest benefit available anywhere in the world - this has been our history and will remain so,” said a jewelry wholesaler.

Abdul Salam K.P. of Malabar said that The rule requires 40 percent localized inputs to be exempt from Gold & Diamonds. “But with 90 percent of it is gold and comes standard gold jewelry, of bullion, which is imported.”

The growing base for a local jewelry manufacturer, the UAE also hosts makers of bullion bars and coins through operations owned and operated by the likes of Kaloti and Emirates Gold.